Federal officials launch investigation into Medicaid managed-care denials, including those in Iowa

Federal officials have launched an investigation into the insurance companies that contract with several states across the country to oversee Medicaid managed-care programs, including Iowa’s.

On Wednesday, the U.S. Office of Inspector General announced a review of medical and dental services and drug prescription denials by the managed-care organizations that oversee Medicaid members’ care.

In Medicaid contract agreements, financial risk for the cost of Medicaid services is shifted from state and federal governments to the managed-care organizations, the Inspector General’s Office wrote in a news release.

This shift “can create an incentive to deny beneficiaries’ access to covered services.”

The Inspector General added that state Medicaid agencies and the federal government are responsible for the financial risk associated with Medicaid services and that managed-care organizations must ensure beneficiaries receive covered services.

In a statement provided to The Gazette, spokesman Pat Garrett said the Governor’s Office “welcomes any nationwide review as we continue working with the Department of Human Services to make improvements to our managed care system.”

During a news conference Wednesday, Gov. Kim Reynolds told reporters the Centers for Medicare and Medicaid Services as well as the U.S. Department of Human Services have oversight over all aspects of Iowa’s Medicaid program.

“We’re working really hard every day to make sure that we’re doing everything we can to protect some of our most vulnerable Iowans,” Reynolds said. “So I have no problem with them looking into that and seeing if there is anything that has to be done differently.”

The Iowa Department of Human Services also said it welcomed the review.

“Ensuring vulnerable Iowans get the care they need is our top priority,” Department of Human Services spokesman Matt Highland said. “The department is committed to ensuring continued and robust oversight of this critical program. DHS welcomes this nationwide review of managed care and looks forward to their insights and recommendations.”

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The Inspector General launched the review at the request of U.S. Sen. Bob Casey, D-Pa., a ranking member of the Special Committee on Aging.

In his letter to the Inspector General, Casey expressed concern that some managed-care organizations “are putting their bottom line ahead of patient health and safety” by continuously denying medical, dental and pharmaceutical services.

Casey cited articles by the Des Moines Register that found routine denials for Iowa members and “numerous failures by MCOs to provide timely notification to people with Medicaid of their right to appeal.”

Casey also cited reports from Kaiser Health News and the Dallas Morning News.

“Medicaid is emblematic of who we are as a nation, reflecting who we value and the ideals we are willing to fight for,” Casey wrote. “We must ensure Medicaid MCOs live up to these ideals and provide Americans with the health care that they deserve.”

State Sen. Liz Mathis, D-Hiawatha — a longtime critic of the managed-care program in Iowa — praised the announcement Wednesday. and said she hopes the investigation will improve the privatized system.

“I am thrilled the Inspector General feels this investigation is important to do,” Mathis told The Gazette. “At least we have the ear of someone who can make a change in all of this.”

Mathis and Sen. Amanda Ragan, D-Mason City, submitted a letter earlier this month to the Inspector General in support of Casey’s call for an investigation.

“Since it was launched three years ago in Iowa, privatized Medicaid has been unsustainable, unaffordable and unaccountable,” they wrote. “... Medicaid advocates, policymakers and other taxpayers deserve an investigation by the Inspector General that provides an answer to the question that we have asked since the start of Medicaid privatization in Iowa: Are some MCOs putting the bottom line ahead of patient health and safety?”

Thirty-seven states and the District of Columbia have adopted Medicaid expansion, according to the Kaiser Family Foundation.

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